Trump is freezing climate funds. Can he do that?

The two signature achievements of President Joe Biden’s administration were a pair of bills that together pumped close to a trillion dollars toward clean energy and disaster resilience. The bipartisan infrastructure law (2021) and the Inflation Reduction Act (2022), or BIL and IRA, were the main drivers of Biden’s climate and economic policies. Both bills funneled grants to states, cities, startups, and nonprofits for renewables and new resilient infrastructure, and the IRA offered generous tax credits to companies and individuals to spur the adoption of renewable technology, like solar panels, EVs, and induction stoves. 

Since taking office in January, the new Trump administration has launched a shock-and-awe attack on the no-strings-attached federal money in both bills. 

Trump has said he “will terminate the Green New Deal, which I call the Green New Scam,” referring to the Biden administration’s climate policies included in the BIL and IRA. In order to make that happen, his administration intends to hold back hundreds of billions of dollars from the Biden laws meant to fund community solar projects, address drought issues, and clean up polluted neighborhoods. Trump’s executive actions appear to violate several federal laws and centuries of legal precedent, as well as multiple active restraining orders from federal courts. It is as yet unclear whether the funding will eventually proceed or ultimately be cut; in the meantime, the individuals and organizations that were expecting funds have been thrown into a state of chaos.

A big part of the chaos stems from the lack of transparency from the Trump administration, which only compounds the fast-moving actions that have sometimes contradicted one another. Here we’ve tried to answer some basic questions: How much funding from the BIL and IRA has already been spent? How much is yet to be paid out? How much is actually at risk of being cut? And what are the odds that the Trump administration will be able to hold back money that Biden already disbursed? 

To help answer those questions and provide reliable information as the situation develops, Grist has created a tool that maps nearly all the projects that were awarded grant funding through the IRA and BIL and offers context, when available, on which may be at risk from Trump’s orders. 

In normal situations, the federal government goes through a series of steps before it spends money. Congress first allocates a certain amount of funding to an agency like the EPA for a specific purpose, such as addressing air pollution from diesel trucks. That’s what legislators did with the BIL and IRA.

After that, the agency chooses an entity to receive some of that money — say, for instance, the city of Denver or an environmental nonprofit in Los Angeles. The agency writes up a contract with that entity setting out the rules of the grant. This is known as “obligating” the money, and represents a binding legal agreement. Only later, sometimes months or years after the fact, does the Treasury Department wire the cash to the grantee. This is known as “outlaying” money.

The executive branch has little control over this process. When Congress appropriates money, the executive agencies must obligate it, except in rare circumstances. Refusing to obligate appropriated money is known as “impoundment”; in 1974, after the abuses of the Richard Nixon administration, Congress passed a law to limit when presidents could exercise that power. In addition to possibly violating that law, refusing to outlay money that’s already been obligated represents a direct breach of contract with an agency’s grantee, which is an even more blatant violation of legal precedent, according to budget experts. 

“The general rule is that once Congress appropriates and directs the expenditure of money, the executive has always been understood to be bound by that command,” said Aziz Huq, a scholar of constitutional law at the University of Chicago who has studied the legality of withholding federal money. “The understanding has been that, once a law is duly enacted, that law [must] be carried out.” He pointed to a 2012 Supreme Court decision where justices found that the government could not withhold obligated funding.

After Trump won re-election in November, the Biden administration rushed to release as much infrastructure money from BIL and IRA as possible. It completed hundreds of new funding agreements with cities, states, tribes, nonprofits, and companies, and ended up obligating the lion’s share of money from the two bills. 

When it came to the climate-focused money from the IRA, the Biden administration made an effort to obligate funds for clean energy and pollution control programs before Trump could gut them. For instance, the EPA managed to obligate every dollar from the landmark Greenhouse Gas Reduction Fund, which has provided $27 billion for community banks to fund solar and home weatherization. 

Biden made less progress when it came to awarding infrastructure-focused money from the BIL, because much of that money could only be disbursed once states and cities finalized construction contracts. As of December, the Transportation Department had only obligated half of the $65 billion that Congress allocated for public transit projects, and one-third of the almost $12 billion that the agency received for airport improvements. 

Spending for environmental justice also lagged, according to a January EPA report. Whereas the agency was able to obligate 98 percent of the $33 billion that it received for “climate action,” it only managed to obligate two-thirds of the $3 billion that had been marked for “protecting communities.” Some environmental justice-related programs, like a $13 million program to monitor air quality at schools in disadvantaged areas, never got off the ground at all. It’s likely that the Trump administration will make every effort to scratch these programs. 

By the time that Trump was inaugurated, the EPA had obligated 88 percent of its funding, and the Department of Transportation had obligated about 65 percent of its funding. The outgoing Biden administration did not release whole-of-government data on the status of its funding. 

But on his first day in office, Trump issued an executive order to “pause” funding from both BIL and IRA for at least 90 days, throwing thousands of infrastructure and energy projects around the country into jeopardy. The order also declares that any funding adjacent to what Trump derisively calls the “Green New Deal” will be cancelled even once the pause ends. Beyond his attack on funding from the BIL and IRA, it’s unclear which programs his administration will decide to cancel.

The “obligated” status could become an issue for grantees. Although the Biden administration obligated a good deal of IRA money, more than $50 billion, it outlaid less than $20 billion of that money, according to an analysis by the Washington Post. Officials made binding agreements to send funds out, but it’s still sitting in the Treasury’s bank accounts, where it’s under the de facto control of Elon Musk, the director of the Trump initiative referred to as the Department of Government Efficiency. Musk has sought to gain the ability to withhold payments at will.

On January 31, John McConnell, a federal judge in Rhode Island, blocked Trump’s executive order on the IRA and BIL, and Trump’s Justice Department later circulated a memo that ordered agencies to comply with the ruling. But funds from the two bills are still in an unprecedented state of legal limbo. 

On Monday, McConnell said that the administration seemed to be defying his order and implied he might hold the administration in criminal contempt if it didn’t unfreeze funds immediately. The administration then filed an appeal to McConnell’s order.

So far, each agency seems to be handling the legal limbo around the pause differently, and one member of Trump’s cabinet is already threatening to claw back money that had already been obligated.